Spirit AeroSystems lost more money in the fourth quarter than it previously predicted and is now warning it will need more cash to continue operating.
The Wichita-based company lost $631 million in the last three months of 2024, bringing its full-year loss to $2.1 billion, it said on 28 February. The loss comes as Spirit continues advancing with a plan to be acquired this year by Boeing and to divest to Airbus manufacturing work it undertakes for the European company.
Excluding interest expenses and other adjustments, Spirit posted a fourth-quarter operating loss of $577 million.
The results are significantly worse than Spirit forecast last month, when it said it expected lose $413 million in the fourth quarter. It ended 2024 with cash and cash equivalents valued at $537 million.
“We will need to obtain additional funding to sustain operations, as we expect to continue generating operating losses for the foreseeable future,” says Spirit. “There can be no assurance that Spirit will be able to obtain additional advances from customers, repay current advances on the specified due dates, renegotiate the due dates or otherwise obtain additional liquidity as needed under acceptable terms or at all.”
Spirit’s operations has been beset by quality problems for several years but the outfit took a beating last year, as Boeing slowed 737 fuselage deliveries from Spirit in a bid to address defects with those fuselages. Boeing also halted all 737 production late last year for nearly three months amid a machinists’ strike.
Meanwhile, Spirit’s programmes with Airbus, which include composite-structures manufacturing for A220s and A350s, has long generated significant financial losses.
“Developments in 2024 have resulted in significant reductions in projected revenue and cash flows over the next twelve months,” Spirit says. “These developments include production and delivery process changes implemented by Boeing, lower-than-planned 737 production rates and the lack of price increases on Airbus programmes.”
Spirit has been seeking to wrest price hikes from Airbus to counter increased production costs.
While cash advances received last year from customers – Boeing and Airbus provided such advances – supplied Spirit with “essential operational liquidity”, it remains in a precarious position.
The company has a plan to secure more funding but warns its ability to execute the plan depends on factors including increasing 737 fuselage production and closing the deals with Boeing and Airbus. Spirit’s plan also depends on the outcome of discussions with customers related to repayment of advances, it adds, without specifying which customers.
Spirit and Boeing have said they expect to close their combination in mid-2025.
Despite the $631 million fourth-quarter loss, Spirit succeeded last quarter in accelerating deliveries. It delivered components for 457 aircraft last quarter, up from 398 in the fourth quarter of 2023.
